SANTA MONICA—The co-creator and three executive producers of the top-rated series “The Walking Dead” (TWD) filed a lawsuit against AMC on Monday, August 14 in Los Angeles County Superior Court, alleging that the network failed to properly distribute the show’s profits, according to reports.
“This case arises from a major entertainment conglomerate’s failure to honor its contractual obligations to the creative people — the ‘talent,’ in industry jargon — behind the wildly successful, and hugely profitable, long-running television series The Walking Dead,” the lawsuit states. “The defendant AMC Entities exploited their vertically integrated corporate structure to combine both the production and the exhibition of TWD, which allowed AMC to keep the lion’s share of the series’ enormous profits for itself and not share it with the Plaintiffs, as required by their contracts.”
In the suit, co-creator Robert Kirkman and executive producers Gale Anne Hurd, Glen Mazzara, and David Alpert accuse AMC of breach of contract, claiming the company failed to pay the proper license fee for the series because the show is owned and produced by AMC Studios and aired on AMC Networks. They maintain the license fee would be much higher if the series were licensed from an outside studio, and the lower license fee greatly affects the share of profits distributed to its “creative people.” The suit, which alleges that AMC has been withholding a significant amount of money that should have been handed over to producers, also involves the spinoff “Fear the Walking Dead” and the live after show “The Talking Dead.”
“When the production company and the network are part of the same conglomerate, as AMC Studios and AMC Network are here, there is a powerful financial incentive to keep the lion’s share of the profit at the network level and not pay a fair-market-value license fee to the production company — thereby depriving profit participants, like Plaintiffs, of their fair share of the series’ profits,” the suit indicates.
The case follows a similar ongoing lawsuit from the show’s other co-creator, Frank Darabont, who was fired during the second season. Darabont’s suit, which demands more than $200 million in damages, questions the amount of money AMC is imputing from each episode of the series.
“While AMC Network previously aired such popular shows as Mad Men and Breaking Bad, the ratings of TWD – and the revenues that accompanied those ratings – have far exceeded the ratings and revenues from those series, and have catapulted AMC Parent, and its financial value to a whole new level,” Monday’s lawsuit claims.
Kirkman’s contract with AMC calls for him to receive 5 percent of profits from the show, according to the complaint. Hurd is to receive 7.5 percent, Alpert is entitled to 2.5 percent, and Mazzara, who took over Darabont’s role as showrunner, is to receive 1.5 percent. The total damages from the suit could approach $1 billion.
“These kinds of lawsuits are fairly common in entertainment and they all have one thing in common — they follow success,” an AMC spokesperson said in a statement. “Virtually every studio that has had a successful show has been the target of litigation like this, and The Walking Dead has been the #1 show on television for five years in a row, so this is no surprise. We have enormous respect and appreciation for these plaintiffs, and we will continue to work with them as partners, even as we vigorously defend against this baseless and predictably opportunistic lawsuit.”